I heard this expression a long time ago about "playing long ball". The person who used the expression was speaking to me about how important it was to build a company or career that you can sustain over the long term. I was a young guy at the time, in my early twenties and the advice really hit home. I never forgot it.
Around the same time, another really successful entrepreneur said to me that when your new company can last for ten years, you have made it! Back then, my reaction was honestly more like..."Damn, I am only three years in and this feels like friggin torture! How the hell am I going to last another seven months, let alone seven years?"
But both pieces of advice were spot on and I never forgot them. It helped me understand that everything I did to build my company needed to be done with a longer term perspective and I needed to set my expectations accordingly.
Fast forward 25 years later and my first company is still going strong. The PR firm I built keeps growing and evolving, even though I am focused on building a new company. (Maybe in reality it's doing so well because I am not around to screw it up :) ) Knowing that the company is still going strong is a huge source of pride for me personally.
These last few years I have been focused on my real estate news tech startup www.thenewsfunnel.com. It has been an incredible journey so far and everyday is a challenge, a thrill and a learning experience. I am four years in and there is still such a long way to go.
One of the things I have noticed as a newcomer to tech is how incredibly short-minded most of the professionals in this field are as it relates to their own sense of timing.
In the tech culture, I read, hear and see how people seem to think in terms of 12 or 24 month exits. They expect to have a $100 million dollar valuation in 6 months from scratch without having any revenue or users. I guess the mindset is that "I saw others do it so why not me?" WTF!?!? Everyone seems to be in such a race. Such a rush. Running as fast they can without a sense of strategy, execution. Without learning to stop, listen and observe with discipline.
Being focused on the real estate tech sector, I have noticed that the sense of false timing and expectation is just as bad, maybe even worse. I have met with some startups who talk about early exits without even having a business model or revenue strategy. And they spend whatever cash they have like crazy with no regard to planning and strategy. And again, all I hear is talk of “Exit! Exit! Exit!”
And all of this in a sector (real estate) that is just being born. I understand that in the consumer tech space there are certainly examples of startups (instant messaging apps like WhatsApp) that grew like crazy and sold for $19 billion in under two years. But they were building something for teenagers who could get all over a trend and scale it in days, weeks, months, etc...
The real estate tech space doesn't even have a fully engaged audience yet! So if you're a founder, slow the hell down! You're gonna be here for a while. A lot longer that you even realize.
If I hear one more tech person running a site and talking to me about their "hockey stick growth strategy" as an actual strategy, I might just take that stick and...
Unfortunately, I think really tough times are ahead for the RE tech sector. Funding has all but dried up. Engagement is still a challenge everyday and therefore revenue is incredibly hard to generate. Combine this trend with the fact that many startups didn't have a "long ball" outlook and it doesn't require much deep analysis to see what's ahead. It's going to be ugly. That sucks but it's a reality.
Of the thousand-plus real estate startups out there, how many will be around next year or the year after... or more importantly, in five or ten years?
I know that a lot of people in our industry like to take shots at CoStar. But did you know that they have been around since 1987?!? They have around $600 million in revenue and are growing every year. Every single year! Say what you want about them, thats friggin impressive.
And so to anyone reading this blog who is thinking about entering the tech sector, or who is running a tech site, if I can offer one piece of advice to you it is this: Get yourself physically, mentally, spiritually and financially conditioned for "long ball". That's how great, lasting companies survive and ultimately thrive.
I was speaking with the COO of one of the most successful RE tech startups the other day, just comparing notes about our two sites. He was talking about how his team is going about building their business and he said, "You know, we have made a lot of progress, but we still have so much work ahead of us that it will take years and years for us to really build a successful company." And this is coming from arguably one of the top tech sites in the sector! One with a multimillion dollar revenue stream and incredibly robust user engagement.